Institutions along with retail investors who hold considerable shares inChalice Mining Limited (ASX:CHN) come under pressure; lose 12% of holdings value

Key Insights

• Significant control over Chalice Mining by retail investors implies that the general public has more power to influence management and governance-related decisions
• 45% of the business is held by the top 25 shareholders
• Insiders have been selling lately

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To get a sense of who is truly in control of Chalice Mining Limited (ASX:CHN), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 55% to be precise, is retail investors. Put another way, the group faces the maximum upside potential (or downside risk).

Following a 12% decrease in the stock price last week, retail investors suffered the most losses, but institutions who own 35% stock also took a hit.

Let's delve deeper into each type of owner of Chalice Mining, beginning with the chart below.

See our latest analysis for Chalice Mining

What Does The Institutional Ownership Tell Us About Chalice Mining?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

Chalice Mining already has institutions on the share registry. Indeed, they own a respectable stake in the company. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Chalice Mining, (below). Of course, keep in mind that there are other factors to consider, too.

Chalice Mining is not owned by hedge funds. Paradice Investment Management Pty Ltd. is currently the largest shareholder, with 6.1% of shares outstanding. With 5.1% and 5.0% of the shares outstanding respectively, State Street Global Advisors, Inc. and The Goldman Sachs Group, Inc. are the second and third largest shareholders. Furthermore, CEO Alexander Dorsch is the owner of 1.5% of the company's shares.

Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Chalice Mining

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

We can see that insiders own shares in Chalice Mining Limited. In their own names, insiders own AU$51m worth of stock in the AU$693m company. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, mostly comprising of individual investors, collectively holds 55% of Chalice Mining shares. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Chalice Mining better, we need to consider many other factors. Be aware that Chalice Mining is showing 3 warning signs in our investment analysis , and 1 of those can't be ignored...

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.